Reliable and Affordable Off-Grid Electricity Services for the Poor: Lessons from World Bank Group Experience

Reliable and Affordable Off-Grid Electricity Services for the Poor: Lessons from World Bank Group Experience

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Reliable and Affordable Off-Grid Electricity Services for the Poor: Lessons from World Bank Group Experience

This learning product draws upon existing IEG evaluations, project documents and analytical work relating to the World Bank Group’s experience with supporting off-grid electrification in client countries.

In recent years, there has been renewed focus on the 1.1 billion people around the world without any access to electricity from either the conventional grid or any off-grid or stand-alone source. Most of these people are poor and are held back from their potential for human development and from the improved quality of life that can be enabled by access to electricity services. In Sub-Saharan Africa alone there are over 600 million people without access, and this figure may rise to 935 million in 2030 if the population grows as projected and the pace of new electricity connections remains at the average annual rate of the last 10 years.

Against this background, the World Bank Group and the United Nations have committed to the Sustainable Energy for All initiative, which is reinforced by Sustainable Development Goal 7 (“ensure access to affordable, reliable, sustainable and modern energy for all”) and the World Bank Group’s goals of ending extreme poverty and boosting shared prosperity.

World Bank Group Commitments to Off-Grid Electricity

The World Bank Group’s commitment to projects for off-grid applications during the FY2000–2016 period was US$1.594 billion, about 2.5 percent of total Bank Group lending for the electricity sector. The predominant portion of the lending was for individual solar home systems, with instances of good practice, mainly in Bangladesh and Mongolia. The lighting Africa and Lighting Global Programs have supported the growth of quality-certified certified solar products and service options, including cash-and-carry plug-and-play solar kits, which provide sufficient power for the most basic services of essential lighting and cell phone charging. Despite some significant examples of micro-grid and mini-grid project components, scaling up in this respect continues to pose a challenge – in terms of institutional arrangements and for commercially viable business models.

This study highlights good practice country program experiences in supporting commercially viable and rapidly scalable off-grid access and services provision models and institutional frameworks. These encompass supply and service delivery chains for solar home systems and microgrids as well as the technologically and commercially fast-evolving pico-solar products and their growing transformative record. These experiences have taken different routes in mainstreaming off-grid electrification according to their own needs and context.

The study points out that from a strategic, nationwide perspective, realizing the full potential of off-grid electrification in each country-specific context calls for a comprehensive approach that can leverage the dynamics of access expansion through both grid and off-grid means in a coordinated manner in space and time.

Summary of Findings

Putting People (Beneficiaries) First, not Technology Solutions

People want affordable, adequate, reliable access “. From a personal as well as a social and national perspective, the opportunity costs of delay in providing even basic access are very high – tantamount to depriving another generation of the benefits of modern services, including education and healthcare services.

Grid Versus Off-Grid: A Falsely Framed Binary Choice

The “grid versus off-grid” trade-off needs to be framed in relation to complementarity and coordination geared toward universal access. Grid and off-grid technologies and access service delivery are not necessarily either-or options to be determined simply based on a narrow least-cost calculus. Rather, looking ahead, off-grid access provision is appropriately viewed as playing a complementary and coordinated role alongside grid rollout in the process of achieving universal access.

Private and Public Sector Engagement: Both Play Roles in Catalyzing and Enabling Scale-Up of Off-Grid Access Rollout

The experience in recent years highlights the vast scope going forward for maximizing synergies in (i) the evolving roles of the World Bank and International Finance Corporation (IFC) in respect of their strengths and comparative advantages in enabling early stage (“pre-market”) development, and (ii) assisting the client countries in designing the participation of the private and public sectors working in close partnership, for realizing the national goal of universal access efficiently and rapidly.

Multiple Advantages of a High-Level Network Planning Platform that is Anchored in a Geospatial and Comprehensive Plan Covering Grid and Off-Grid Means

A national geospatial least-cost strategic rollout plan serves to further identify where the potential beneficiaries are located geospatially. This enables low-cost placement and expansion of existing electricity access infrastructure. It also facilitates closer alignment of multiple and varied donor programs with national priorities and targets and the syndication of financial support from multiple sources, including the private sector, for on-grid and off-grid expansion in space and time.

Sector-wide organizing architecture and programmatic financing can be effective for rallying and orchestrating stakeholder participation in closer alignment with national priorities than otherwise; as well as syndication of program financing of an integrated grid and of-grid rollout, up to a medium-term horizon.

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The Independent Evaluation Group evaluates the work of the World Bank Group to find what works, what doesn't, and why. IEG evaluations provide an objective assessment of World Bank Group results, and identify lessons learned from experience. Through independent evaluation, IEG is helping the World Bank Group achieve its twin goals of eradicating extreme poverty and boosting shared prosperity.